Wednesday, 17 July 2013

I’ve had a quick look at the latest labour market
statistics from the Office for National Statistics, mostly covering the quarter
March-May 2013. These are overall a good set of jobs figures, with the
positives on balance stronger than the negatives. Employment is up by 16,000 on
the quarter (though, alongside population growth, not by enough to prevent a
fall of 0.1 percentage points in the employment rate) and unemployment has
fallen on both the Labour Force Survey (down 57,000) and JSA benefit count
measures (down 21,200 between May and June). The unemployment rate fell by 0.2
percentage points to 7.8%.

The best news of all is a strong quarterly rise in
full-time employment of 28,000 and increased working hours (the number of
people in part-time employment fell by 12,000). Alongside a fall in temporary
employment (down 15,000) and self-employment (down 28,000), fewer redundancies
(down 19,000) and more job vacancies (up 24,000), this suggests that confidence
is returning to the jobs market with employers cutting back on contract workers
in favour of permanent staff.

Overall women have again fared better than men in the
latest quarter (14,000 more in work and 41,000 fewer unemployed, the
corresponding figures for men being 2,000 and 16,000) and there has been a
welcome fall in youth unemployment (down 20,000 for the 16-24 year age group as
a whole although this is almost entirely due to a fall in the number of young
people in full-time education seeking work – the number of young people in work actually fell by 31,000 on the
quarter).

Less welcome is news that long-term unemployment is
continuing to rise (up 15,000 on the quarter to a 17 year high of 915,000) and
that the number of people of working age who are economically inactive is also
increasing (up 87,000, though again this is partly due to fewer full-time
students looking for work who are as a result classified as economically
inactive rather than unemployed). Not everybody is therefore benefiting from
the overall improvement in the labour market.

Likewise, despite a slight
increase to 1% in the rate of growth of regular pay, pay rises continue to lag
well behind inflation (running at 2.7% on the CPI measure in the corresponding
quarter), suggesting that our struggling economy is able to create more jobs
only because people are desperate to price themselves into work. This is not a
recipe for either economic or social well-being and should be viewed as a sign
of continuing labour market malaise whatever the headline jobs and unemployment
figures show.